KKR Forms Joint Venture with Monterra Energy

May 15 2015 | 11:34am ET

KKR announced a new joint venture with Monterra Energy  to pursue investments in the midstream energy sector in Mexico.

 Under the agreement, KKR is making an equity commitment to Monterra for the development of new projects and acquisition of midstream assets and businesses. Financial terms and details of the partnership were not disclosed.

Founded in 2014 by Arturo Vivar and Michael A. Williams, Monterra pursues select investment opportunities in the midstream sector in Mexico. 

“Monterra is excited to partner with KKR,” said Arturo Vivar, CEO of Monterra. “Together with KKR and its investment expertise, Monterra will provide a differentiated set of capabilities that can be applied to the development and operation of strategic midstream projects and assets in Mexico.”

Tudor, Pickering, Holt and Co. estimates that Mexico should attract approximately $50 billion and $13 billion in capital expenditures spending for pipeline infrastructure and power generation, respectively, over the next five years.

Monterra intends to own, develop, build and operate midstream infrastructure in Mexico through both new (greenfield) and existing (brownfield) projects and assets. Primary areas of focus include terminaling and storage infrastructure for refined products, crude oil and natural gas liquids (NGLs) as well as pipeline and rail logistics assets to transport and handle refined products, crude oil and NGLs. Other areas of interest may include natural gas transportation and storage and power generation.

“This partnership is about backing a strong team with decades of experience in the energy sector and in Latin America to deliver superior solutions to Mexico's growing energy sector. We look forward to working with the Monterra team,” said Marc Lipschultz, Global Head of KKR’s Energy and Infrastructure business.

KKR’s contributions to the joint venture will be funded primarily from KKR’s North America XI Fund. KKR's Global Energy & Infrastructure business invests across the entire energy supply chain and the firm manages approximately $10 billion in energy and infrastructure related assets. 

“We are very optimistic when it comes to the macroeconomic landscape in Mexico, and we continue to believe the country has significant opportunities – in energy and beyond - for long term investment,” said Jorge Fergie, KKR’s Head of Brazil and Latin America.


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